Roberto Mancini is facing fresh doubts over his future at Manchester City after reports in Spain stated on Friday evening last night that Manuel Pellegrini, the Málaga manager, had agreed to replace him at the start of next season.

It is claimed that City will pay Pellegrini's €4m (£3.4m) release clause to secure his services, with Isco, the Málaga midfielder, also interesting the club as they consider whether to make a formal bid for him. While it is understood that City were privately claiming no knowledge of any deal, Pellegrini has told his players that he will leave Málaga at the end of this season.

The timing of the claims threatens to undermine City's quest to win Saturday's FA Cup final against Wigan Athletic at Wembley, with one bookmaker slashing the odds to 10-1 on that Pellegrini will take over from Mancini.

As reported by the Guardian last month, Txiki Begiristain, the City director of football, met with Jesus Martínez, Pellegrini's agent in Madrid. When the meeting was put to Mancini, the Italian attempted to laugh it off but did admit that he did not know why Begiristain was seen with Martínez.

On Friday Mancini suggested he is fully aware of how ruthless management can be. "I won seven trophies in Inter in four years and they sack me after four years [in 2008]. This is football. I know football enough to understand this situation."

Mancini's long-term future at City is certainly in the balance. Yet victory on Saturday would mean a third major trophy in his three full seasons at City, to follow last season's Premier League title and the FA Cup triumph in 2011, which may strengthen Mancini's hand.

Although Mancini still holds considerable power at the club, it is Begiristain and Ferran Soriano, the chief executive, who have begun driving the long-term strategy, with the pair behind the potential introduction of a new 4-3-3 playing formation for next season, and they are also working closely together on bolstering the squad this summer.